Mortgage Interest Rate Calculator Germany

Fixed mortgage interest rates are rates that remain unchanged for a specific fixed interest period. The fixed interest period is the timeframe during which the interest rate for your home financing is fixed. During this time, the rate stays constant, providing you with stability for your monthly payments.

After the fixed interest period ends, you must refinance your mortgage. This means you will either receive a new interest rate from your current bank or switch to another bank for a new loan. There is a risk that the new interest rate could be higher than before—this is known as interest rate risk.

The duration of the fixed interest period can vary, and you can choose the one that suits you best. Common fixed interest periods range between 5 and 20 years. A longer fixed interest period offers more security, while a shorter one often comes with lower interest rates.

Current mortgage interest rates in Germany fluctuate depending on the financial market, inflation rate, and your creditworthiness. With the mortgage interest rate calculator for Germany, you can get a real-time estimate of interest rates based on current market conditions and your situation. The calculator helps you find the best terms for your mortgage financing.

Interest rates and government bonds
Banks usually set interest rates for home financing based on government bond yields, particularly the 10-year government bond. This reference value is used to estimate interest rate trends and assess risk.

Another reason why most mortgage interest rates are closely aligned with the 10-year rate is that, in Germany, customers have the right to refinance their mortgage for free after 10 years. Since refinancing or switching lenders is possible after this period, interest rates for longer terms, such as 15 or 20 years, are typically higher. Banks factor this risk into their calculations, making long-term rates often higher than the 10-year rate.

Impact of the loan-to-value ratio
The more equity you bring into your financing, the lower the loan-to-value ratio. This reduces the bank’s risk, which in turn leads to a lower interest rate. A lower loan-to-value ratio means better conditions for your mortgage.

To get the best interest rate, you should aim to contribute as much equity as possible, choose an appropriate fixed interest period, and maintain good creditworthiness. The mortgage interest rate calculator for Germany helps you compare the best offers and secure optimal terms for your mortgage.

Whether a KFW loan is suitable for you depends on several criteria. Our financing advisors are happy to help you explore the options and decide whether a KFW loan in combination with your main mortgage makes sense. An interest calculator for Germany can help you compare the conditions and rates for your KFW loan with other loans. Here is an overview of the KFW programs:

Homeownership Program (Program 124): This program is available for all residential properties, provided the property is purchased for personal use. Use our home loan interest calculator for Germany to calculate the interest rate for this program.

Homeownership for Families (Program 300): For constructing or purchasing energy-efficient new builds (at least KFW 40 standard). Eligible families are those who meet the following criteria: personal use of the property, children under 18, first-time homebuyers, compliance with the KFW 40 energy criteria, and adherence to the income cap. You can simulate the financing rates for this program using a home construction interest calculator for Germany.

Energy-Efficient Modernization (Program 261): This program is for buyers of newly renovated buildings or owners looking to modernize their property to at least KFW 85 standards. It is also suitable for new residential constructions. Use our interest calculator for Germany to find the best interest rates for modernization.

Energy-Efficient New Build - Personal Use (Program 297): For constructing or purchasing an energy-efficient new build (at least KFW 40) intended for personal use. Our home loan interest calculator for Germany can help you calculate the financing costs.

Energy-Efficient New Build - Rental (Program 298): This program is for constructing or purchasing an energy-efficient new build intended for rental purposes. It is similar to Program 297 but specifically designed for rental properties. Use our mortgage interest calculator for Germany to calculate interest rates and review your financing options.

The mortgage interest rate calculator for Germany allows you to simulate additional repayments, showing their impact on total debt, interest costs, and loan terms. This helps you plan your financing more flexibly and efficiently.

Choosing the right fixed interest period is crucial for financial security and long-term planning. Many first-time buyers make the mistake of selecting a fixed interest period that is either too short or too long.

Risks of a too-short fixed interest period

A shorter interest rate fixed interest period is often associated with a lower initial interest rate. For example, a 0,1 % reduction in interest on a mortgage of 200.000 € could mean annual savings of about 200 € to 300 €. However, this could lead to a large remaining balance at the end of the fixed interest period. If interest rates rise at that point, refinancing could result in additional costs of 2.000 € to 4.000 € per year, which may cause financial strain depending on your situation.

Risks of a too-long fixed interest period

On the other hand, a fixed interest period that is too long can lead to inflexibility, especially if you plan to move. In such cases, banks often charge high early repayment penalties for terminating the contract early. However, after 10 years, you have the option under German law to refinance or switch lenders without early repayment penalties.

If you still need to move before the fixed interest period ends, renting out the property could be a good option. In large cities, you can often rent the property for an amount that covers your monthly loan payments, making renting more sensible than selling.

Finding the optimal fixed interest period

The optimal fixed interest period depends on your individual plans and financial situation. Our recommendation software helps you find a suitable period by considering costs and financial risk. For long-term planning, it is advisable to lock in the rate for 10 to 15 years to protect yourself from interest rate hikes.

In Germany, fixed interest periods of up to 30 years are possible, but such a long-term commitment should be carefully considered, as banks charge higher interest rates for long-term security.

Our recommendation

Avoid a too-short fixed interest period: Avoid fixed interest periods of only one to three years, as the risk of interest rate increases is high, and the rates for such short periods are often not significantly lower.

Avoid a too-long fixed interest period: A long fixed interest period can be expensive, especially if you plan to sell early. A fixed interest period of 10 to 15 years generally offers a good balance between security and flexibility.

Our financing experts help you choose the right fixed interest period. Using our advisory tools, we simulate various scenarios to find the optimal solution for your home financing.

The time it takes to get a mortgage approved largely depends on the specific lender and its processing capacity. Many German banks still manually review applications, which can affect the processing time.

• Direct banks like ING or DKB usually process an application in 2 to 4 business days

• Traditional banks such as Deutsche Bank or Sparkasse typically take 5 to 10 business days.

If you’re under time pressure, our financing advisors can help you find a lender who can process your mortgage quickly. Our goal is to get you an approval as soon as possible.